The New FTC Disposal Rule Has Big Consequences

Paper shredders are not just for the office anymore.  The new FTC Disposal Rule has provisions that effect many Americans, even individuals like you.

On June 1, 2005 the Federal Trade Commission set forth a new rule to add to their previous Fair and Accurate Credit Transactions Act , also known as the FACT Act or "FACTA", which had previously been signed by President Bush in December of 2003.  This new Disposal Rule calls for the destruction of all consumer information to be disposed by way of shredding, pulverizing or burning. 

As many homes have replaced their wood burning fireplaces with gas versions, the option of shredding has become the preferred choice, and the sales of home paper shredders have grown steadily.  The new FTC Disposal Rule has set the sales of paper shredders into record growth.  And the reason for this is that the new regulations reach beyond large corporations and small businesses.  If you have any private consumer information of anyone from your housekeeper, your yardman, a service contractor, or a nanny, you are required now to dispose of these records properly.  This includes all paper and electronic documents.

These new regulations allow for class action lawsuits, where multiple employees are affected.  In addition, states can fine you up to $ 1,000 for each employee offense, and the federal government can fine you up to $ 2,500 for each violation.  This is in addition to the damages that entitled to the victim of the identity theft.  If you fail to properly destroy this sensitive information, expect to be held monetarily accountable, and find yourself in court.  This is due to the fact that identity theft not only costs in the thousands of dollars to remedy, it can take hundreds of hours to correct.  It is because of the great loss of time and money, which victims of this type of offence suffer, that has most people in agreement that the passage of the Disposal Rule has been long overdue.

With the price of shredders so low, the risks of identity theft so high, and the consequences so great, the home paper shredder could become as common as a blender, and more used than your bread maker.